AVCs and Tax Relief

AVCs are a smart and tax efficient way of saving for retirement, as relief from Income Tax is allowed on AVCs at the marginal rate. This means that if a member saves AVCs through their employer as a deduction from salary, the reduction in take home pay is much less than the amount of the AVC you are saving. The following table shows the tax relief on an AVC of €100:

Revenue have limits on the amount of AVCs you can save each year. The maximum amount that you can save towards your pension through regular pension contributions and AVCs each year and still receive tax relief depends on your age. The following table shows these limits:

You will move from one band to the next on 1st January of the tax year which includes the relevant birthday, for example if you are age 40 in December 2024 you can start contributing in January 2024 up to the maximum 25% of your total pay and still receive tax relief on AVCs paid to the Scheme. This maximum 25% of your total pay includes your standard contributions paid to the Scheme.

To download the CWPS AVC booklet, please visit our Forms and Booklets page.

What are AVCs - Video